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au
$200
Port
Rail
$100
$50
Coal Price
$0
FY12
FY14
FY16
FY18
FY20
PwC Productivity Index - 1995 to 2011
(Base Year = 1995, Base = 1000)
November 2012
Slide 2
November 2012
Slide 3
Investment Capital
Operating Asset
What
How
Why
Increase investment in
profitable assets.
Increase margin
Maintenance
Reliability
Asset utilisation
Operational cycle times
Operations planning and
control
November 2012
Slide 4
Core
Activities
Exploration
Discreet
Activity
Solutions
Program
Planning
Drilling
Efficiency
Remote Logistics
Cross
Activity
Solutions
Extraction
Pit Optimisation
Extraction
Methodology
Fleet Productivity
& Fit
Processing
Plant Optimisation
Maintenance
Strategy &
Execution
Capacity Planning
Outsourcing
Warehouse & Logistics
Optimisation
Supply Chain Optimisation
Shared Services Analysis &
Implementation
Logistics
Intermodal
Optimisation
Procedural Review
Capacity Analysis
Support
Services
Benchmarking
Process Mapping
Resource
Allocation
November 2012
Slide 5
Extraction
Drill
Blast
Load
Haul
Processing
Crushing
Grinding
Sizing
Separation
Concentration
Concentrate wanted
material into a
transportable form
Disposal
Dispose of the
unwanted material
(tailings).
November 2012
Slide 6
Exploration
Extraction
Processing
Logistics
Support
Services
November 2012
Slide 7
Drill
Blast
Load
Haul
Having a blast
November 2012
Slide 8
Drill
Blast
Load
Haul
November 2012
Slide 9
Blast
Load
Load broken ground into
trucks
Inefficient processing
Waste of explosive
Re-work
Deliver preferred
material blend to
processing plant
Haul
Haul ore and waste
Critical success factors:
Avoiding double-dipping
from inefficient loading
practices
Drill
Blast
Load
Haul
Mobile Fleet
November 2012
Slide 11
Drill
Blast
Load
Haul
Loss
Loss
Available time
Operating time
Loss
Effective operating
time
Actual effective
production time
Loss
1 Lost production rate due to operational matters (eg queuing due to unlevel
Loss 1 Loss 2 production flow)
2 Lost production rate due to maintenance matters (eg equipment partially
broken)
Quality losses
November 2012
Slide 12
Drill
Blast
Load
Haul
Influencers
Productivity
Performance Drivers
Asset Utilisation
Mine Planning
Operations Planning
and Control
Maintenance/Operations communications
Operating protocols
Plan compliance
Equipment effectiveness
Maintenance effectiveness
De-rating due to maintenance
MTTR and MTBF
Strategic Sourcing
Supplier performance
Service performance to business
Objective
Operational
Effectiveness
Capital Cost
Life-Cycle Cost
Maintenance Cost
Operating Cost
November 2012
Slide 13
Drill
Blast
Load
Haul
Operational factors
Influencers
Equipment
Availability
Performance Drivers
Administration
Logistics
Maintainability (MTTR)
Reliability (MTBF)
Breakdowns
Objective
Asset
Effectiveness
Supplier performance
Supply & materials performance
Facilities and resources effectiveness
Supply cycle time performance
CapitalCost
Life-Cycle
Cost
Maintenance Cost
Operating Cost
November 2012
Slide 14
Drill
Blast
Load
Haul
3.5 minutes
Wait at shovel
Potential latent
capacity:
2.8 minutes
Load
10.5 minutes
1.6 minutes
Travel loaded
Dump
1 minute
2 minutes
1 minute
2.5 mins
0.8 mins
0.6 mins
9.2 minutes
Return to shovel
Leading practice
targets
(240 t trucks)
Opportunity
Capital saving
= ?
Maint & Ops saving
= ?
November 2012
Slide 15
Drill
Blast
Load
Haul
71%
52%
Maintenance
Availability
90%
Data definitions to be
confirmed
Only Q1 data available
No Constraint analysis
performed
No Fleet matching performed
Geological and mine planning
not incorporated
Caveats
% of fleet
Capex
(unutilised)
Asset Utilisation
6.3
29%
16
20
Operational Effectiveness
8.4
38%
21
28
November 2012
Slide 16
Exploration
Extraction
Processing
Logistics
Support
Services
November 2012
Slide 17
Crushing
Grinding
Sizing
Separation
Separate wanted
and unwanted
material
Concentration
Concentrate
wanted material
into a form that
can be
transported
Disposal
Dispose of the
unwanted
material
(tailings).
Objectives
Improves
productivity of
shipping and logistics
November 2012
Slide 18
Crushing
Grinding
Sizing
Separation
Concentration
Disposal
Train Loop
Waste to reduce
Problems / Causes
Motion
Waiting
Overproduction
Processing
Defects
Inventory
Transportation
Unused
Creativity
Train Loadout
Clean Coal Stockpiles
Prep Plant
Raw Coal Stockpiles
Refuse Bin
Rotary Breaker
ROM Stockpiles
Large batches
Making for the sake of it
Ignoring CHPP constraints
Ignoring customer demands
November 2012
Slide 19
Crushing
Grinding
Sizing
Separation
Concentration
Disposal
Coal
Low SG
PwC Asia School of Mines 2012
PwC
Middlings
Rock
High SG
November 2012
Slide 20
Crushing
Grinding
Sizing
Separation
Concentration
Disposal
$1,600,000
Revenue ($/Yr)
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
November 2012
Slide 21
Crushing
Grinding
Sizing
Separation
Concentration
Disposal
1 BTU
1425 BTUs
4.2 Hours
November 2012
Slide 22
Exploration
Extraction
Processing
Logistics
Support
Services
November 2012
Slide 23
Operations
Utilisation
Effective operating time
71%
52%
Maintenance
Availability
90%
(20%)
(80%)
% of
fleet
Opex
(unutilised)
Asset Utilisation
6.3
29%
16
20
Operational
Effectiveness
8.4
38%
21
28
Asset Utilisation
10
Operational Effectiveness
10
14
Capex
Blend ratio:
1 CF B : 2 CF A
CF-B
2.38mtpa
2.38mtpa
Iron Ore
Gold
Thank you!
November 2012
Slide 26
Want to learn more about how you can beat the cost curve?
1.
Contact
Franz Wentzel
Director Energy, Utilities and Mining
e-mail: franz.wentzel@au.pwc.com
Office: +61 7 3257 8683
Mobile: +61 418 126 217
2. Available resources
November 2012
Slide 27
Thank you.
This publication has been prepared for general guidance on matters of interest only, and does not
constitute professional advice. You should not act upon the information contained in this publication
without obtaining specific professional advice. No representation or warranty (express or implied) is
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